1/3 Of Student Loan Debtors Take Out Loans For Holiday Shopping

Will your student loan debt put a dent in your holiday spending plans? A recent survey by Student Loan Hero suggests that while student loan debtors may try to save money during their holiday shopping runs, they will not let debt curtail their spending.

According to the survey, one-third of consumers with student loan debt will take out personal loans to cover holiday expenses. Only 18% without student loan debt plan to take out a personal loan. Credit card statistics follow suit, as one-third of student loan debtors plan to spend more than $500 on credit cards over the holiday as compared to 22% of consumers without student loan debt.

Consumers with student loans are also more likely to increase their spending on the upcoming holiday season. Only 37% of survey respondents without student loan debt intend to spend more this year than last year, while 55% of respondents with student loan debt plan to do so.

This seems counterintuitive, but it makes sense when considering attitudes toward debt. The stress of student loan debtcan create a dangerous mindset in several ways.

There's the fatalistic approach that accepts increasing debt "I'm already in debt that I can't pay off, why not go further in debt?" Another approach is to brush it off entirely, as noted by Jocelyn Paonita, Founder of the Scholarship System. "A lot of students, they get this [credit] card and they look at it like free money."

It's easy to see how these mindsets take hold, especially among Millennials struggling with excessive student loan debt. The average outstanding student loan debt is $26,700, and skyrocketing costs in recent years have put more of the total $1.34 trillion student loan debt burden on Millennials. By one estimate, approximately 20% of a Millennial's budget is allotted to paying off student loans.

Financial experts agree that it's important for consumers to keep their overall debt under control to avoid a debt spiral. Millennial Money Expert Stefanie O'Connell calls this a "snowball of financial struggle" and advises, "The thing Millennials really need to understand about student loan debt is that paying it back is not a passive practice."

Adam Carroll, Founder and Chief Education Officer at National Financial Educators, calls student loan debt "the worst weed to have in your garden because if it goes unchecked, it will grow to massive proportions." There are so many options for delayed or reduced payments with student loans that debtors forget that interest is piling up. Excessive holiday spending via credit or personal loans simply adds to the burden.

The survey shows that 62% of respondents expect to take at least 6 months to pay off holiday credit card debt, but you can reduce your burden greatly by limiting your credit spending to what you can pay off at the end of the month. Carroll advises, "The folks who pay off their credit card every year or every month are called deadbeats in the industry ... because the credit card companies make no money on them at all. This the one time in life you want to be a deadbeat."

What should you do if you've already acquired extra holiday debt to go along with your student loan debt? The following advice from Sean McQuay, Credit and Banking Expert at NerdWallet, is directed toward student loan debt but applies to both types. "Work on it. Start paying it off. There's really no good way around that." A solid plan and a realistic budget are the best ways to start.

If you're attempting to reconcile holiday gift spending with your student debt load, start by laying out your budget and look for creative ways to save. If nothing else, you'll reduce the odds of holiday impulse buying. Join the holiday "deadbeats" and let the credit card companies make money on someone else next year.

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